Energy prices

Mr Miliband is getting what he asked for. He wanted an energy price freeze for heating and lighting our homes. This is now happening.
In the meantime wholesale energy prices on world markets have been falling, as the price of oil falls. Mr Miliband now wants to see price cuts. The problem is, his former policy is getting in the way of the full price cuts we would all like to see.
Energy companies were persuaded to buy more energy forwards in response to Mr Miliband’s announcement, in case he won the General Election. Many of them locked themselves into relatively dear energy to avoid future rises, before energy prices started to tumble. Others are reluctant to cut prices yet, in case he wins in May and forces his price freeze on them. You can only buy forward easily for part of the two years, so have to worry about possible rises towards the end of the period.
It’s a good illustration of how well intended political intervention can make things worse. We now have energy companies locked into buying dear energy for longer, at a time of falling prices.
The long term answer to our dear energy problem lies in harnessing the various sources of cheaper power, moving away from expensive wind energy. The short term answer is for politicians to interfere less and allow the market to bring prices down, as is happening for petrol and diesel for our vehicles.

113 Comments

  1. Mark w
    January 14, 2015

    I wonder how much fuel is wasted sat at temporary auto controlled traffic lights and on needless lengthy diversions when councils and police shut roads for no good reason.

    Of course then we have idiotic permanent traffic lights and crossings designed to lengthen traffic queues. I wouldn’t mind so much of they didn’t claim to care about the environment and green house gas (yes of course I know that is a ploy to tax and boss around)

    1. Livelogic
      January 14, 2015

      Indeed road blocking and designed congestion seems to have been the main aims of road management in most cities for the past 15 years or so. That and encouraging cyclists to travel by a method which in cities is about 25 times more dangerous than travel by car.

      1. Lifelogic
        January 14, 2015

        The roads yesterday we so much clearer in London as the congestion causing (and often nearly empty buses) were not stopping & blocking the roads every two hundred yards or so – due to the strike.

        1. Lifelogic
          January 18, 2015

          And the diesel pollution on Oxford street was also much reduced as buses are a major contributor.

      2. Bazman
        January 14, 2015

        The improvement of pointless elf an safety for cyclists like in other more civilised European countries is not however an option. It is better for all if they travel by car a least for you and that is what really matters?

        1. Lifelogic
          January 15, 2015

          Well it is certainly far safer for them if they do. If cyclists want to club together and buy some safe land for them to cycle down that that is fine by me but usually they want everything but to pay nothing.

          Blocking the roads for car users using bus lanes, anti car lights, huge islands and bike lanes is not a good plan, it just causes congestion and wastes lost peoples time.

          1. Bazman
            January 16, 2015

            Take a look at the Netherlands and Germany. The Dutch enjoy the most extensive cycle network in the world. This small country has over 25,000 miles of high quality traffic free cycle routes at least some improvement to the transport system could be derived from the bike in this country. Had the Dutch road system collapsed. Is it better than ours? Your do nothing pay nothing attitude to everything as long as it does not affect you is laughable. How about road tolls as the most fair way? No? Thought not. Seems OK for medicine though. Strange that. Do at least try to learn something.

          2. Lifelogic
            January 18, 2015

            Tolls on road make good sense with modern charging technology, so long as you reduce the excessive and over taxation of motorists to compensate – road tax, 70% of petrol, VAT etc. That way you can reduce congestion by charging different rates at peak times and you can reward the provision of the much needed new road space and better junction design.
            Designed hopefully to reduce congestion for a change.

    2. Iain Gill
      January 14, 2015

      How much fuel is wasted with red lights holding cars letting phantom buses through, when its a Sunday and those buses are not even running.

      1. Lifelogic
        January 14, 2015

        Exactly a usually empty bus lane pushes everyone into the other lane wasting millions in fuel and even more in valuable people’s time waster every year.

        But from the governments perspective they do get lots of money in fines from their bus lane mugging cameras. I think they call this “providing a public service”. The service of mugging them and wasting their time.

        1. alan jutson
          January 14, 2015

          Iain

          “…Red Lights…”

          Agreed.

          Wokingham Council now seem to have a fixation about putting traffic lights everywhere, even on mini roundabouts.

          Would not be so bad if they were only in operation at peak traffic hours, but to be stood at traffic lights on a roundabout at midnight when there is no other traffic in sight is not only frustrating, but polluting and a waste of fuel and time.

          They had a phase of different coloured tarmac for a few years, we had beige, red and green being used.

          Then we had chicanes, and speed humps.

          Now we are onto very expensive cycle lanes, and white lines everywhere.

          The place is beginning to look like toy Town.

          1. Bazman
            January 16, 2015

            Traffic lights on roundabouts. What is that all about? The whole point of a roundabout, at least small or medium ones, is so traffic lights are not needed.

        2. Bazman
          January 16, 2015

          What do you propose as a mass public transport system for those unable to afford car or a taxi? Subsidised taxis?

          1. Lifelogic
            January 18, 2015

            Car, bikes, scooters are far cheaper (and more convenient) than most public transport anyway. Even after the over taxing of cars and subsidy of public transport.

  2. Richard1
    January 14, 2015

    Indeed this is quite a lesson for the ridiculous Mr Miliband. We should also remember that Mr Miliband was the author of the climate change act which mandates the exclusive use of expensive renewable energy, and the closure of swathes of British industry (unless some dramatic new cheap energy is discovered).

    The SNP are very quite on oil prices. Shouldnt we be shaking their tree a bit and asking them to update their forecasts for revenues for an independent Scotland based on current oil prices?

    1. Bob
      January 14, 2015

      @Richard1
      Well said! I hope that our host will hold his feet to the flames on this issue, but he shouldn’t expect any help from the BBC in exposing Miliband’s ineptitude because they have about the same level of understanding of market forces.

      1. Mark
        January 14, 2015

        Andrew Neil did an excellent job of demolishing Rachel Reeves’ posturing.

        1. Lifelogic
          January 18, 2015

          Not that hard. Andrew Neil seems to be the only sensible interviewer the BBC has. The rest are all chip on the shoulder, arts grad, BBC think, lefties (and not too bright in the main either).

    2. Max Dunbar
      January 14, 2015

      The less we hear from the SNP the better. I’m not interested in shaking their tree, only in cutting it down. There will be no ‘independent’ Scotland.

      1. fedupsouthener
        January 14, 2015

        The SNP must not be allowed to take part as they are not a UK party but one that is only interested in the welfare of the Scots. Whatever the other parties discuss they will take an opposite stance. They always have to be different.

      2. Richard1
        January 14, 2015

        Opinion polls suggest the SNP will have a sizeable presence at Westminster after the election. unfortunate given the folly and incoherence of their policies but perhaps not surprising given devolution and the ridiculous ‘vow’. So their arguments needed to be countered.

      3. William Gruff
        January 15, 2015

        That’s for the people of England to decide and if the SNP forms a coalition British government with Labour in May,the appetite of the English for independence may become all consuming.

        My own view is that a Salmond- Miliband British dictatorship in England will be an excellent thing, undoubtedly very painful but more likely to cure at least some of our ills rather than kill.

        I am confident that Scotland will be independent well before mid century, wholly by their own efforts although at our insistence, and guess who they’ll blame when they finally kill the goose that has laid them so very very many golden eggs.

  3. Leslie Singleton
    January 14, 2015

    It wouldn’t surprise me if Miliband had only just learnt that there is any such thing as forward markets. Whether Yea or Nay to that, aren’t (weren’t?) his idiotic blatherings just an attempt at rigging the market? What chance investors in new forms of Energy deciding not to bother? It is difficult enough as it is but if they had been left alone to decide which form of Energy to pursue (I have long favoured some combination of Tidal, Marine Turbine or Wave Power myself–with Wind of course being ridiculous) it would be Job Done by now. Miliband is no King Canute.

    1. stred
      January 14, 2015

      According to the ex-Decc technical chief Prof MacKay, in his book Sustainable Energy, Wave and Tidal are even more expensive than onshore wind and have very limited capacity, as the energy just is not there, even though we have the best in Europe.

      As regards politicians lumbering us with expensive energy, they have recently given the French an order to build our biggest nuke, to be ready by 2013 when the only other one left running will be Sizewell B, at a cost 20 times that just obtained by competitive tender for reserve capacity to back up wind, and many times the cost of Sizewell. ( see Private Eye). If the Labour government had not decided to abandon nuclear, we could have built more of this safe design and had as much nuclear as France by now, at much less cost and solved the CO2 problem at the same time.

      1. stred
        January 14, 2015

        Prof MacKay’s excellent book is available free on the Net.

        1. Lifelogic
          January 14, 2015

          It is indeed an excellent book (though even he is a little too much on the governments greencrap agenda for me). It is just a shame that people like Ed Davey, Chris Huhme, Milliband, Cameron either are just too stupid to understand the reality or they do but cynically push their expensive energy agenda anyway. Knowing it is hugely damaging and stupid but it suites them politically.

          1. fedupsouthener
            January 14, 2015

            They should be listening to Dr John Constable and Deiter Helm who all know what they are talking about when it comes to matters of energy. There are not enough people like John who understand the damage they are doing to the country by pursuing this stupid policy.

      2. Leslie Singleton
        January 14, 2015

        Stred–As regards Tidal I had thought it was wild wading birds and salmon runs that were the problem not lack of energy. There was a programme on the box the other night demonstrating a Tidal up and down of 30 feet and given that it is the whole ocean that is moving twice a day it is hard to believe that for the cost of a barrier an enormous amount of energy would not be produced. Wave Power I can imagine not producing a lot but on Marine Turbines, based on Tidal flows rather than ups and downs, there are companies in Scotland that are already in to this. Again how can it not work with any kind of Tidal race? Anything rather than the fatuous Wind. I might try and read the Book but in any event I suspect there are others saying the opposite. What does Ed Miliband think?

        1. stred
          January 14, 2015

          Life and Leslie. Prof MacKay is rather on the Greencrap side but at least it’s honest Greencrap. He bothers to work out the energy available by physics and geography and gives realistic costs and the feasibility and quantities. That’s why he calls it .. Without the Hot Air. Essential reading. Ed Milliband doesn’t think much about the subject apparently,but he is sincere.

        2. Lifelogic
          January 14, 2015

          Tidal needs to enclose a huge area to get a decent quantity of energy areas such as most of the the Severn estuary bay. It is rather expensive to do and has huge environmental impacts. The bays also tend to silt up fairly rapidly then need constant dredging. The energy produced varies a lot with the neap and spring tides.

          It is no a silver bullet. Advanced nuclear, heat pumps, conservation, better efficiency, LED lighting, combined heat and power, perhaps PV and wind (if and only when) they are cheap enough. These are perhaps the best long terms solution once all the cheap oil gas and coal has gone.

        3. fedupsouthener
          January 14, 2015

          Trouble is, tidal also needs subsidies and will be 6 times more expensive than conventional energy.

      3. Lifelogic
        January 14, 2015

        Exactly renewable has not got the energy density needed not the consistency of supply needed. Far to expensive and intermittent. All the engineer and physicist know this but it is not about engineering, economics or physics it is about a fake greencrap religion that may garner some floating votes!

        1. Bazman
          January 14, 2015

          As pointed out you before it depends on the application. This is an engineering fact. Calling all renewable energy fake green crap religion is in effect fake energy crap religion. Lots of wind off the coast of Walney in Barrow and never seems to drop. Truly massive amount of wind turbines there. The economics are another story.
          Did you understand some sense?

      4. REPay
        January 14, 2015

        The Germans are now building coal-fired stations…I think between French nuclear and Germany oil-fired the UK will be able to keep the lights on. This is a great solution for those who want to see the UK really integrated into the EU. I suspect it may be rather expensive, less reliable and ultimately unsustainable but we can feel really proud of our commitment to green energy.

        I am going long on candles…

        1. Bob
          January 15, 2015

          All part of the LibLabCon plan to make us more EU dependent, same goes for the military cuts, and diminution of our farming and fishing industries. The UK will end up as one large housing estate dependent on food and energy imports from the EU.

      5. Bazman
        January 14, 2015

        Here are the real time energy outputs of the various methods used in this country including exports to produce electricity in the UK. Wind does not add anything. Really?
        http://www.ukenergywatch.org/Electricity/Realtime

        1. Ian wragg
          January 15, 2015

          Check the annual graphs 2014
          3 months with almost zero output.

        2. stred
          January 15, 2015

          When it is windy the onshore and offshore maximum capacity is used and an equivalent capacity of gas stations is turned down to about half their total. We pay £100-150 for wind and 50-100 for gas, including the levies on carbon as arranged by the Ed Davey and Ed Milliband via legislation. Gas generators are compensated for not producing and, if the system is overloaded so do wind generators. Have a look at the website on a calm day and see the gas go up while wind is next to nothing. Total wind energy over a long period seems to be about 20% of capacity.

        3. Bazman
          January 15, 2015

          This is how the rest of the world generates electricity.
          Look at China and her use of coal. Might be a bit smoggy in places!
          http://www.theguardian.com/environment/2015/jan/12/sp-fuel-consumption-worldwide-graphic

  4. Old Albion
    January 14, 2015

    Energy would be even cheaper if we didn’t have the idiotic green levy too.

    1. Livelogic
      January 14, 2015

      Indeed but the energy market in the UK is not very competitive, still it is better than the banking market which gets away with ripping off nearly everyone.

      1. Bazman
        January 14, 2015

        If it where like banking and subsidised as much as housing we would have no electricity.

    2. Mondeo Man
      January 14, 2015

      How are we supposed to reduce our carbon footprint to meet targets when we are adding to our population at these rates ?

      It can only be done by a fall in living standards.

  5. Ian wragg
    January 14, 2015

    It’s time the whole energy market was broken up. The vertical integration where generators sell to their own marketing companies is uncompetitive and obscene. The majority are foreign owned and have no allegiance to us whatsoever. How many countries let their utilities fall into the hands of foreigners
    The political class of this country are a joke and the sooner we clean out the stables the better

    1. stred
      January 14, 2015

      The US had anti-trust laws in order to prevent vertical integration, as they understood the potential for corruption. Apparently this has been forgotten in the EU. The artificial market for sales of electricity, subsidising both production and non-production, to suit fluctuating wind, seems to be even more prone to fiddling, especially with energy companies buying and selling to themselves.

      Scottish and Southern ( Chaired by the same bloke in charge of the Smith Commission) have a recorded message played while waiting to sort out wrong bills. It tells us how they are leading the field in wind and green energy for our future. I explained to the polite young man in Perth that I would not be using their firm again as it was making things expensive.

    2. Livelogic
      January 14, 2015

      Indeed the confusion marketing and constant tariff changes helps them too.

      They should have to quote rates on a comparable basis with a fixed time before they can change them again.

      The same is true of insurance policies which are virtually impossible to compare for value unless you have a month or two of free time and a knowledge of law and insurance risk.

      1. JimS
        January 14, 2015

        The Office of Fair Trading or the BSI should define standard ‘products’ for energy, telecoms and insurance.

        Of course suppliers could make alternative ‘offers’ but then it would be easier to see what has been added (or removed) from what we basically need.

        The idiot at Ofgem that stuck us all with standing charges should be sacked. If we are to be stuck with them then at least they should be fixed across the industry. As you say ‘competition’ is pointless if needs extensive analysis and monitoring to achieve ‘best value’.

        1. REPay
          January 14, 2015

          Hiring BSI, an organization that people trust, to enable a standard comparison of the energy tariffs would make huge sense! The energy industry might be prompted to fund it.

      2. Lifelogic
        January 14, 2015

        Best just to self insure in general, unless you know you are a much higher risk than average but can be insured at the standard rate.

      3. Bazman
        January 14, 2015

        The smoke and mirrors are there to confuse and make you take take your eye of the ball like in the mobile phone market. Use a comparison site and change every time its viable. They will play by some rules even if they are their own. They even blame changing suppliers for price rises. The competition makes them charge more leading them to all charge the pretty much the same. Nice work if you can get it.

  6. Dom
    January 14, 2015

    “It’s a good illustration of how well intended political intervention can make things worse”

    Except it was not well-intended. It was aimed at duping the people that believe in free lunches, and the Government has stacks of cash that it can hand out. If successful in holding down prices, investment in infrastructure would suffer, leading to the next major issue in 10 years time.

    The Best answer to imperfect capitalism is MORE competition, not pretending that value can be set centrally.

    1. Livelogic
      January 14, 2015

      Indeed more competition in Banking and Energy is urgently needed.

      1. Bazman
        January 14, 2015

        How will nuclear compete and why will any of the energy companies build without subsidy? When was the last new power station built in the UK by a private company?

  7. Narrow Shoulders
    January 14, 2015

    It’s a good illustration of how well intended political intervention can make things worse……….the short term answer is for politicians to interfere less.

    Messages to be stamped on the forehead of most in public life. Small government requires less funding, encourages independence and allows communities to thrive.

    Labour and the Liberals see the answer to every issue in legislation, this present administration follows the same leanings. Your leaders should recognise that doing nothing is often productive.

  8. alan jutson
    January 14, 2015

    Yes the law of untended consequences strikes again.

    We will of course only know the true facts of profiteering or not, when we eventually see the end of year accounts and shareholder dividend announcements.

    Another Labour headline political statement for the press, another blow for the electorate.

    In the meantime I see some people, including our Prime Ministers father in Law, seem to be making quite legally (and who can blame him) rather a lot out of wind farm subsidies, which at the time of introduction, were a guaranteed return for 25 years.

    Once again the so called political elite is shown up as having little commercial experience and even fewer negotiating skills.

    The sooner politicians realise they are in many cases the problem, and not the solution, the sooner we may start to move forward in many areas.

  9. DaveM
    January 14, 2015

    Totally OT. If someone is afraid to debate on TV (which is what it looks like to the public), how on earth can he be trusted to represent the nation’s interests abroad? The PM is becoming a laughing stock amongst his own electorate – God knows what the rest of the world must think of him. A lapdog to a German.

    Reply He is not afraid to debate. The Greens are mounting a legal challenge to the 4 leader debate, so he is right to say they should also attend.

    1. stred
      January 14, 2015

      The first debate will be between Cameron/Milliband. The second between Cam/ Mill and Clegg. Cameron is worrried that the last one between Cam/Mill/Clegg and Farage will not be fair because the Greens have more support than the Libdems/Clegg- so why is Clegg allowed priority over UKIP and Greens? If the latest polls are used as measures he should be a minority in debate no 4.

    2. fedupsouthener
      January 14, 2015

      Unfortunately John, that is not what the public and others in the House of Commons think. Paddy Ashdown was no Breakfast this morning and he said he thought Cameron was afraid. The only party he needs to be afraid of is the straight talking, truthful, open and sensible UKIP party!! The rest of them will be talking absolute drivel.

    3. Roy Grainger
      January 14, 2015

      How can he insist that the Greens should appear in the debate but not the SNP ?

      Reply The Greens are a national party, the SNP is only standing in Scotland.

      1. Duyfken
        January 14, 2015

        That is a weak response, JR. The SNP already have 6 seats and are in line for more. Our Westminster parliament is for the United Kingdom and in that sense, the SNP is a national Party.

        Reply I have no problem with adding them to the debate, but then do you add the Welsh Nats and the Northern Irish parties?

        1. Duyfken
          January 14, 2015

          Whether or not those other Parties could be considered sufficiently “major”, they are all national parties, which is the point you were originally contesting about the SNP.

          1. Denis Cooper
            January 15, 2015

            What makes you think that electors in the rest of the UK would have the slightest interest in listening to the SNP leader argue that people should vote for SNP candidates when they would not be able to even if they wanted to? It would be no more than an abstract debate except for the 8% or so of viewers resident in Scotland whose voting intentions could possibly be altered by what was said; it would be even worse than TV channels deciding that everybody in the UK will be riveted by detailed accounts of New Year celebrations in Scotland just because they make a bigger thing of it.

        2. fedupsouthener
          January 14, 2015

          They do NOT represent the whole of the UK. They have had their referendum and Scotland decided to stay in the UK. End of. Nicola Sturgeon will not speak for the UK but for Scots only and that is no what this election is all about.

        3. Max Dunbar
          January 14, 2015

          Let’s stick with facts, ‘The SNP already have six seats…’ and leave it at that. They are a minor party who offer candidates for election in a region of the UK that contains roughly 8% of the UK electorate. They are not an inclusive but an exclusive party as they have not hitherto stood candidates anywhere but the Scottish region of the UK. Further, they have just lost a referendum within their own small self declared zone that defines their need to exist in the first place.
          As a party within the UK but not of the UK, Dr Redwood’s reply is reasonable.

        4. Lifelogic
          January 15, 2015

          You are right he is not really “afraid” to debate, he just thinks it would damage his chances. This as his stance on all the major issues as compared to Farage’s position is indefensible. Appearing as an empty podium will not help him much either.

          Cameron is just making a judgement that it is not in his interests to appear and try to defend his indefensible positions. He could of course move to Farage’s position which is far clearly far more sensible on a every single issue.

    4. DaveM
      January 14, 2015

      You and I know that, hence my bracketed comment – however, it’s the perception of the electorate which wins or loses votes unfortunately, and the Lab controlled BBC will exploit any perceived weakness to give their masters the edge.

    5. The Prangwizard
      January 14, 2015

      If the broadcasters go with ‘the empty chair’ they are blackmailers.

      1. Lifelogic
        January 14, 2015

        Nonsense it is up to Cameron to accept or send someone else if he is just too frit.

        The problem is that he knows full well that he cannot make any sensible case for totally unselective & open door, large scale EU immigration, expensive green crap energy, the non existent benefits and huge costs of the EU, the deteriorating free at the point of rationing NHS, or his long grass EU renegotiation policy or his 299+ tax increases and serial ratting.

        He is not even asking for anything substantive from the EU.

    6. Lifelogic
      January 14, 2015

      The real question is why are the Libdums there. In the last EU election the best representation of the public (as they are not forced to compromise) it was UKIP 1st Labour and Tories third. Libdums and Greens were nowhere.

      Cameron is correctly frit and correctly so. He is a good debater his position is totally indefensible against the sensible Farage line.

      On open door immigration, on his fake long grass EU negotiation, on his past ratting, on the dreadful & deteriorating NHS, on his 299+ tax increases, the attacks on pensions, child benefit and personal allowances, on his IHT ratting, on his tax, borrow and piss down the drain HS2, on his damaging war in Libya, on his expensive energy greencrap drivel …….. he is simply up the creek without a paddle.

      His list of six theme missed the electorate by a mile or rather more than a kilometre as Cameron would doubtless have it.

    7. zorro
      January 14, 2015

      Reply to reply – John, I think that the PM might be able to easily deflect these charges by simply stating the following….’Let me clear about this (he likes to start like this), I am both proud and determined to debate my record as PM before any of the other aspirant candidates because I believe that my vision for the UK is the correct one and provides the way to a prosperous and self confident UK on the world stage. I understand that there have been some challenges around the proposed participants in these TV debates. Whatever the result of these challenges, I will be there proudly defending this government’s record’….. Wouldn’t you agree?

      zorro

    8. Mondeo Man
      January 14, 2015

      Four left wing politicians against one right wing.

      It really doesn’t seem fair.

      Nigel Farage had his work cut out already, without the inclusion of the Greens.

      1. Denis Cooper
        January 15, 2015

        Far more importantly, four incorrigibly pro-EU politicians ganging up against one who wants us to leave the EU.

      2. zorro
        January 15, 2015

        😉 😉 applause

        zorro

  10. Bert Young
    January 14, 2015

    The last paragraph in the blog this am makes a lot of sense . Market forces are the best arbiters of demand and price ; inexperienced politicians ought to have more sense and keep their fingers out of things .

    1. fedupsouthener
      January 14, 2015

      Let the engineers decide what is best for this country regarding energy and not the politicians who know nothing.

    2. REPay
      January 14, 2015

      John’s insight about markets and political meddling should be first nature to someone who read PPE! I suspect Mr M missed that lecture…

  11. Denis Cooper
    January 14, 2015

    I had come to think that the man is a complete fool, however recently I read an article saying that in fact he is not a fool, he is highly intelligent but we don’t always see that because he is hiding his light under a heap of bushels.

    Meanwhile, the EU’s Court of Justice has just ruled that the OMT bond buying proposal appears to be legal under the EU treaties provided certain conditions are met:

    http://www.theguardian.com/business/live/2015/jan/14/european-court-of-justice-rules-on-ecb-bond-buying-programme-business-live#block-54b62aa2e4b067c0b4e68b07

    Now there’s a surprise!

  12. Matt
    January 14, 2015

    When the gods wish to punish us, they answer our prayers.

    It seems that Mr Miliband prayed for a freeze in energy prices.

    It also seems that the UK is praying for Mr Miliband to be Prime Minister.
    Does anybody know how I get a work visa for Canada or the USA?

  13. JoeSoap
    January 14, 2015

    The two people in this country to take least notice of are Cameron and Miliband. One wanted the price of energy frozen when at its peak, the other refuses to debate on the balanced platform proposed by the regulator.

    Neither of these two are on the side of the people.

    1. fedupsouthener
      January 14, 2015

      You are so right. They are not on the side of the people or industry. They have brought in a policy which is costing us dearly and is not the answer to so called climate change ( which is utter nonsense anyway) and is ruining our landscapes, putting people out of work in the real world – a world where industry is not funded by subsidies and contaminating water courses in the process. The wind industry is totally out of control in Scotland with some councils having to process over 100 applications for wind in a month. The onslaught just goes on and on and it is no exaggeration to say that people unfortunate to live near these useless things have been persecuted beyond reason. Water courses here have been contaminated and the people responsible for the quality of water have turned a blind eye to it all. Not one politician has shown concern about this and the leader of the Green party in Scotland has not commented either. It is an utter disgrace and legal action is pending. Can you imagine the likes of Caroline Lucas and her cronies going on about this if it were connected to fracking?? Oh yes, they would be shouting it from the roof tops. The renewables fantasy has put a lot of people into fuel poverty with many more to come and it will be to the detriment of the health of the nation. The sooner we repeal the climate change act, the better.

      1. Max Dunbar
        January 14, 2015

        The same attitude prevailed 30 years ago with salmon farms. Mustn’t stand in the way of progress. What an ecological disaster that proved to be. The wind farm farce is just another similar folly. I wonder what the aliens from Smash would make of it.

    2. Lifelogic
      January 14, 2015

      Exactly they are virtually the same – green crap, pro EU, ever larger state, tax borrow and piss down the drain merchants. Cameron has 100 on his sensible wing that perhaps forces him to be say 10% better. Nothing it it really.

  14. oldtimer
    January 14, 2015

    Politicians may try to, and do (see Climate Change Act), rig the market but they cannot beat it. Let us hope others also draw attention to the stupidity and futility of the Miliband interventions in the energy market.

    1. Lifelogic
      January 14, 2015

      Nature and the laws of physics cannot be fooled by greencrap religions.

  15. English Pensioner
    January 14, 2015

    With the energy companies locked into higher prices, it will give Miliband the chance to shout about our high energy prices and the fact that companies not reducing them in line with world prices.
    As the majority of the population don’t understand about “forward buying” he’s in a win-win situation.
    As for petrol prices, with something like three-quarters of the present price being tax, the petrol companies have very little scope for real reductions.

  16. Denis Cooper
    January 14, 2015

    Off this topic but apropos of the subject of your article on free speech at the weekend, JR, it is worth putting this into google:

    “The Political Establishment Responsible for the Paris Atrocities has Hijacked the Protests”

    and reading the excellent new article by Gerald Warner which comes up there.

    It is pointed out, inter alia, that 18 months ago the supposed freedom lovers at Charlie Hebdo published a petition to President Hollande calling for the National Front to be compulsorily dissolved; of course that doesn’t in any way mean that they should be murdered by anyone, but I wonder whether Cameron realised that by joining in with the “Je suis Charlie” chorus he and other world leaders were aligning themselves with people who favour the banning of political parties with which they disagree.

  17. Kenneth
    January 14, 2015

    The usual socialist problem: unintended consequences.

    Some unkind people may call it stupidity, especially as they had been warned.

  18. A different Simon
    January 14, 2015

    This boils down to Politician’s and Civil Servant’s belief in their magical ability to pick winners (or create them) .

    It is difficult to attach much credence to this as before Cuadrilla announced the massive gas in place figures in Lancashire , hardly any MP’s would even have been aware of the shale gas and tight oil phenomenon in the U.S. .

    The problem comes when policy mistakes are made , which can happen in the private sector or public sector . The Climate Change Act is one example .

    The political establishment has no mechanism for rectifying mistakes so it goes into denial …. until eventually they cannot deny it any longer and have to act .

    The market rectifies mistakes much more quickly .

    At a time of a rapidly changing energy environment , only the market can react quickly enough .

    The politicians , for their part , must create a stable regulatory environment with the correct policy objectives – i.e. establish the “what” and not attempt to detail the “how” .

    I don’t have any confidence in our current bunch to do this .

    1. Alan Wheatley
      January 14, 2015

      As to “what”, “how” and “confidence”, I agree.

      But worse, what bunch can do it?

      1. A different Simon
        January 15, 2015

        Alan Wheatley ,

        There is only one bunch which is not run by people who have been brainwashed by that Oxford PPE course ; UKIP .

        They are not perfect .

        LibLabCon are never going to grasp the nettle on making accommodation more affordable and dealing with the pensions crisis ( private sector workers with no provision for old age ) . UKIP might – eventually .

        Like LibLabCon , UKIP also seem to show too much faith in the City of London .
        Private pensions have been a disaster and not just because of the charges .
        There is scant evidence beyond a few short periods over history that the stock market can provide pensions for the masses .

        There are some things which the state is in a position to do better than the private sector and pensions is one yet UKIP seem to have thrown the state out with the bathwater .

        However imperfect UKIP are now , we aren’t going to get anywhere until we start governing ourselves again and UKIP are the only party which offers that .

  19. Roy Grainger
    January 14, 2015

    As Milliband is so worried about the cost of living crisis someone should ask him if he will amend the BoE inflation target from 2% to zero, or even negative (deflation). If not, why not ?

  20. fedupsouthener
    January 14, 2015

    By the way John, I know I have ranted on about wind but I do appreciate that you also believe wind is not the answer. Keep up the good work.

  21. Ex-expat Colin
    January 14, 2015

    “The short term answer is for politicians to interfere less and allow the market to bring prices down, as is happening for petrol and diesel for our vehicles”

    OPEC…hardly a market – still a significant weapon I think.

  22. Shieldsman
    January 14, 2015

    We have on the one hand energy sources – oil, gas, and coal all subject to global pricing and currently falling.
    On the other we have gas and electricity prices rising due to Government green policies.
    Look at the back of your energy bill, Government environmental and social schemes 8%, VAT 4%, applicable to both gas and electricity.
    Buying the energy from the Grid represents 52% of your bill.
    Generating the electricity is subject to taxes (Carbon price floor and carbon credits). Then the price paid for renewables is dictated by the DECC, approx £100 onshore, £150 offshore per Mwh.
    Grid capacity cannot handle the North of Scotland wind output there the generators are paid constraint off payments.
    The Climate Change Act demands that fossil fuelled (coal & gas) electricity generation ceases. The DECC plan to force every household to convert to electricity for heating and cooking with a tripling in cost, plus the capital expenditure.
    How this extra renewable electricity demand will be met Ed Davey has never explained.
    The only way to get energy prices under control is to repeal the Climate Change Act, with UKIP being the only Party to promise this action.

  23. mike fowle
    January 14, 2015

    The irony of this is just delicious. When Mr Miliband announced the price freeze (2013 Labour Conference?) political commentators hailed it as a masterstroke, apparently ignorantly or dishonestly avoiding the fact that His Climate Change Act had caused prices to rise by requiring less efficient ways of generating power. Now it has come back to bite him. As you rightly say, energy companies were buying forward to avoid his freeze so energy is more expensive than it need be, thanks to Ed.

    1. Max Dunbar
      January 14, 2015

      Probably letting the energy companies off the hook a bit but nevertheless socialists have no grasp of commercial reality, that’s why they are socialists.

      1. William Gruff
        January 15, 2015

        You’re doing ‘socialists’ an injustice. Most of the few genuine socialists I’ve known have had little if any awareness of ‘commercial reality’ and they didn’t need it: that was not what inspired and drove them.

        Socialists see ‘commercial reality’ (I have what you want – as in need and lack – and you must do as I wish and satisfy my wants before I will give you what you want, and should you decide to take it for yourself I control sufficient of your kind – with the promise that in serving me they can obtain what they need and lack – to prevent you from doing so.) as an inherent flaw that can be perfected out, if I may use so clumsy a phrase, by means of another inherent flaw: ‘commercial reality’ (I can make you do as I wish not because I have what you lack and need but because I control sufficient of your kind with the promise of giving them what they lack and need, which is a sense of self worth obtained from power over those as weak as you.).

        They’re not socialists because they have no grasp of commercial reality; they have no grasp of the latter because they are the former. Theirs is a different reality and one which those who accept Darwin’s theory of evolution ought to consider a possibility, unless they think our present state is as far as we can go.

  24. CHRISTOPHER HOUSTON
    January 14, 2015

    So the energy companies gambled not on a horse, not on a number in a casino but on:

    1. The possible outcome of an Election
    2. The possibility that a Labour Prime Minister was telling the truth before he gained power.
    3. The forward market price of oil and gas.
    4. The rate of development, if any, of fracking.
    5. The possibility that the oil price will not be subject to a sudden change because of Jihadist action.
    6. That a geo-political solution regarding Iran/Russia/Ukraine/EU will not have a downward affect on oil price.ETC ETC

    There is no case for the nationalization of energy companies but the excellent one they themselves provide today. Britain is singularly unblessed with competent managements of just about anything.

    1. Mark
      January 15, 2015

      It appears that the gambler on energy markets was Mr Miliband, who is now trying to indulge in hindsight trading by claiming he never called for a price freeze. Keep the politicians out of it: our energy markets suffer far too much distortion from politicians fixing prices already. Inform consumers that they may hedge if they wish by taking out fixed price contracts – but that they should expect these to be more expensive on average, since insurance has a cost. Let the market work.

    2. William Gruff
      January 15, 2015

      CHRISTOPHER HOUSTON:

      … Britain is singularly unblessed with competent managements of just about anything.

      It’s time to lay ‘Britain’, whatever that means, to rest.

  25. waramess
    January 14, 2015

    In four years the Conservatives have stubbornly refused to address the issue of (lack of) robust competition in this market.

    Much as I agree with the sentiments you voice, simply leaving it to the market will not work in this case because there is no alternative to electricity in many instances and the present generators are not interested in competing.

    You might find the conclusion here of some interest: http://www.iea.org.uk/blog/price-freezes-and-price-caps-wont-work-we-need-a-competitive-energy-market.

    Millibands proposal to stop generators from retailing electricity might be a good model to adopt.

  26. ian
    January 14, 2015

    This government is all propaganda, real inflation still at 5% rpi 1.6% there is no chance of deflation in this country. They will print money again before election to win votes and tell you that they have save you from destruction to get your vote. Next year cpi will back up above 2.50% and the rpi at 3.50% and real inflation hitting well over 5% with houses price and rents forging ahead as usual. If you think they would let down they friends and their selfs you are wrong, the only ones going down will be the usual ones but who cares if you just won a election. School headmaster 250,000 net 76.500 less inflation. As i say long live deflation and they could not give hoot about debt as you will see. I wonder about how much the headmaster pension will come to. When deflation does come it will so quick it be all over in a blink of a eye as they crash but that is sometime off, I want to see them go right up and i mean right up before the plug is pulled, so they no chance of getting a handle on it, i mean build them right up on they own BS and let them have it, wipe them all out in one go as they have wipe you out.

  27. ian
    January 14, 2015

    They think that thet are indestructible

  28. Dr Dan H.
    January 14, 2015

    To change the subject slightly, might I point out once again the stark, bleeding obvious (which our gracious host here has already pointed out)?

    People listen to politicians, and use these utterances as fair warning of what a politician will do.

    Politicians can, and do say some utterly idiotic things, as Mr Milliband repeatedly demonstrates.

    When politicians go out in public and say things which are barking mad, people act on this information. Mr Cameron going out in public and stating baldly that he wants GCHQ to be able to read all messaging on the Internet is just such an instance; to do this, he needs to mandate back doors into SSL and SSH encryption.

    Modern encryption is designed so as not to have these back doors, and if you mandate that they are installed, you then add in one more weakness as criminals will then know that there is an easy way to break these forms of encryption. Knowing there is a way in makes breaking in much easier, and if you know where the keys may be, then it gets easier yet.

    Modern hackers range from the fiendishly subtle, to the knuckle-draggingly stupid, but you don’t just face one sort, you face absolutely all of them all the damn time, and if you go and put up a stonking great target that says “Hack this and get the keys to the kingdom”, then every low-life out there (including a lot of other nations, the USA included) are going to have a pop at it.

    Worse, if someone finds a way not to use your mandated back doored software (as they will, by compiling their own copy of Chrome, for instance) then you’ve failed twice over. You’ve made life insecure for all law-abiding people, and you cannot even conduct the spying you actually wanted to do in the first place! You will also have mortally offended the banks, and crippled online commerce for no net gain whatsoever.

    Please, Mr Redwood, find someone with the patience of a saint and get them to explain this to Mr Cameron. It may take some time, but it’ll prevent him stealing Mr Milliband’s position as political Chief (Incompetent ed).

  29. They Work for Us?
    January 14, 2015

    Reading the comments so far reinforces the need for the electorate to firmly control what politicians do or sign up to on their behalf “Please may I politics…….” via a referendum on all major issues. The Climate Change Act, EU Treaties, accepting EU Budgets, Large scale immigration, etc etc etc would never have been given the go ahead by the electorate. Yesterday on Nick Robinson’s programme on Democracy, Tony Blair asserted that the man in the street just wants to elect leaders and leave them free to govern. Bitter experience of what has been done to the country and the British suggests nothing could be further from the truth and the exact opposite is the case.

  30. Jon
    January 14, 2015

    Yes, thank you Mr Miliband! They don’t understand or want to understand the private sector or the markets. Yesterday morning there was increasing demand for options on oil at $20 a barrel. That’s not to say it would, just that people are prepared to hard pay cash to guard against it actually happening.

  31. Bazman
    January 14, 2015

    I would take anything the energy companies claim with a bucket of salt A short time ago the privately owned bus and coach companies were telling us they needed to raise fares due to the high cost of oil and the associated costs of this, now oil is half the price it was they are telling us that oil is not really a factor in fares as they buy years in advance. Which is it? The real truth like the energy companies they are run for the benefit of a few subsidised by the state and not for the transportation of the public in rural areas and for those without aces to a car or the means to afford a Taxi. Energy companies the same. Millions are freezing and they and the government are to blame.
    My house in 1999 cost £23pm no costs £85pm for gas and electricity. Green issues to cause of all these rises and privatisation has lowered costs. You tell yourself that if you like. As you tell us feudalism for neo surfs is good too.
    Daily Mail for all you believers.
    Page 10 today:
    http://www.dailymail.co.uk/news/article-2909016/Labour-s-price-freeze-chaos-energy-bills-fall-Party-forced-issue-clarification-plan-cap-costs-drop.html
    Centre pages today:
    http://www.dailymail.co.uk/money/bills/article-2908750/Wooden-Spoonawards-Scottish-Power-UK-s-worst-customer-service.html
    Get rid of this privatisation nonsense and lets have energy companies run for the benefit of the country not just an elite few. Blaming Green issues for everything is deluded. They are the cause of all the problems? Get real as many of you clearly need to on many issues of state bad, private good. Deluded dogma. Four of the big six are owned by German Spanish and French state owned companies and are paying very low or even no corporation tax despite reaping significant profits used to subsidise their own more regulated Energy markets, in particular France with a massively subsidised nuclear sector and Germany with its wind farms.

    1. Edward2
      January 16, 2015

      If bus or energy companies have bought “futures” ie fixed fuel price contracts into the future, then until these run out they will not benefit from the recent reductions, nor will they make any savings to pass onto you in the form of lower prices.
      Im puzzled why you think re-nationalisation would achieve lower prices for you.
      If you look at the profits of the energy companies supplying the UK market they are not very high and compared to assets invested the return on capital is also not very high.
      This means a nationalised system could only give you lower prices by deciding to subsidise prices and pinching money from some other area of Government spending.
      The pinching of energy companies profits would not be enough to reduce prices to the level you want.

      1. Bazman
        January 16, 2015

        As usual if business tells you something you believe it.
        Strange tough, they have put up prices relentlessly since 2009 without fail, when oil was last at $50 a barrel, so why the need to increase prices in 2010/11/12 and then when prices were stable at $105 a barrel? Of course this is what happens when companies have no real competition, subsidised access to exclusive routes and absolutely no council pressure to change.
        As for energy as I have pointed out 98% Of the market is controlled by a cartel of six companies of which four are foreign owned and after four years of inflation-busting price hikes that have increased their average profit per household more than ten-fold how can this be right and justifiable? They all look and sound the same too with similar prices and local monopolies so don’t tell us about competition. You could just have a big monopoly owned by the government, which could regulate prices and use its big balance sheet and state guarantee to borrow money cheaply instead of every ­impoverished customer as a free market casualty in an unpoliced war, mere hostages in a lawless world, which allows them to make those who can’t give them what they want get cut off or cut themselves off.
        Remind us how much subsidies are already being paid out to these companies for gas and coal and how much in massive nuclear subsidies too and remind us how many power station have been built in the last five years? None is the answer and yes you are right wind is not the complete answer. Green subsidies are the cause of all the problems? Deluded nonsense from know nothing right wingers.

    2. Mark
      January 16, 2015

      It is precisely the pseudo-nationalisation via endless diktats from DECC and OFGEM that have caused the price rises you decry and the failure to pass on commodity price falls (because the diktats benchmark on 18 month forward purchases, only exacerbated by Miliband’s ill-considered intervention 16 month ago).

  32. Mark
    January 14, 2015

    I predicted the consequences of Miliband’s folly when he made his original price freeze call. Looking back to September, 2013 when he made the call, gas for January 2015 (i.e. now) cost a little under 75p/therm. It presently trades for under 47p/therm. OFGEM keep cutting their assumptions about the amount of gas we consume in their “Supply Market Indicator” (presumably because we are forced to turn down our thermostats to pay the rising prices) – it’s now down to 13,800kWh of gas, or about 471 therms – so our bills could be £139 lower (inc 5%VAT) on their definitions – not the paltry £24 reduction announced by E.On.

    It was of course Miliband who had the last go at setting the rules for OFGEM in his 2010 Energy Act. They were made so toothless that the energy market investigation has had to be handed to the CMA instead. His record of failure on energy policy continues unabated.

  33. Larry the Cat
    January 15, 2015

    The Heating Oil market is functioning correctly John.

    Home owners who heat their homes with Heating Oil are immediately benefiting from the collapse in energy prices; as they pay the spot heating oil price from suppliers, and are paying 50% less for energy than a year ago.

    The consumer gas market needs more liberalisation, not price controls.

  34. Richard
    January 15, 2015

    I do not know how it is possible to write about energy prices without mentioning the Climate Change Act.

    An act voted into existence by a majority of MPs from the Con/Lab/Lib parties and designed to increase prices as a method to cut energy use.

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